"A Pro-Family, Pro-Growth Legal Immigration Policy for America"

November 6,1989 A PRO-FAMILY, PROGROWTH LlEGAL IMMIG'DTION POLICY FOR AMERICA INTRODUCTION For only the fourth time ever, Congress is restructuring America's legal immigration system This July the Senate passed the Immigration Act of 19

89. It would increase slightly the number of foreign born admitted to the United States each year an d place a greater emphasis on their skill and education levels as a condition of entry. Currently, 95 percent of U.S immigrants are admitted on the basis of their family connections in the U.S The House of Representatives began hearings on September 26 on immigration reform proposals and may pass a bill later this year Few issues are of such long-term consequence to the U.S. as deciding how many immigrants it should welcome and where they should come from.

Today's ixnmigrants and their children will influence America economically demographically, and culturally well into the next century, just as previous waves of immigrants have shaped America distinctly in this century.

Long Overdue Changes. There is near universal agreement that the immigration system e stablished by the 1965 Immigration Act no longer fully sexves American economic and social policy objectives. In 1987, for example U.S. firms were permitted to bring only about 25,000 highly skilled immigrant workers, including scientists, engineers, comp u ter technicians, and business executives, into the 140 million-person U.S. workforce. Industry has 1 In 1986 Congress passed the Immigration Reform and Control Act (IRCA which dealt with illegal immigration. The main components of this law are: 1) imposin g penalties against employers who hire illegal immigrants 2) granting amnesty to illegal immigrants in the U.S. prior to 1982, and 3) initiating a temporary guest worker program for U.S. agriculture.requested about four times this number to fill skilled po s itions in domestic labor shortage occupations. Earlier this year Frank Kittredge, the President of the U.S. ForeignTrade Council, told Congress: Increased admissions for employer-sponsored immigrants are critical for U.S. business.2 Although family-sponso r ed immigration is the cornerstone of current policy, it too has become increasingly constrained over the past 25 years.Tens years to reunite with relatives ih the U.S.-These delays conflict with the pro-family values that the current system was supposed t o promote.

Immigration to the U.S. is now heavily restricted by Congress. The U.S accepts only about 600,000 immigrants and refugees per year, or roughly 2.5 entrants for every 1,000 U.S. residents? This is only one-half the nations historical rate of immi gration and one-tenth the rate in peak years at the turn of the century.The U.S. now has a smaller percentage of foreign born relative to its population than most industrialized countries including Australia Britain, Canada, France, and West Germany!

A Small Step Forward. What America needs is a pro-family, pro-growth immigration policy for the 1990s.The centerpiece of immigration reform legislation, therefore, should be gradual immigration expansion. The Senate took a small positive step in this dire c tion with its passage of the Immigration Act of 1989.The bill, S. 358, sponsored by Senators Edward Kennedy, the Massachusetts Democrat, and Alan Simpson, the Wyoming Republican would allow roughly 630,000 immigrants to enter the U.S. each year, a modest i ncrease over current law. It also would give higher priority to employer-sponsored immigrants, while creating new immigrant categories for foreign entrepreneurs investing in the U.S. and skill-based immigrants seeking to come to the U.S. independent of em ployer or family sponsorship.

Adopting each of these reforms would benefit the U.S. economy.

The House, where three immigration reform bills are pending, should view the Kennedy-Simpson Bill as a springboard for more comprehensive reform.

Under the Senat e bill, delays in reuniting immigrant families would persist, if not lengthen, while thousands of productive and highly talented immigrants would continue to be denied entry.These remaining defects could be solved by raising immigration levels even furthe r than proposed.by the Senate bill. of thousands of foreigners now-arexwflonti.ng waiting p-edods of over fifteen am 2 Frank D. Kittredge, testimony before the Senate Subcommittee on Immigration and Refugee Affairs Judiciary Committee, March 3,1989 3 About 75,000 of these newcomers were refugees. Refugees, including the tens of thousands of Soviet Jews and Central Aqericans who have petitioned to come to the U.S. and have dominated the news in recent months, are persons fleeing political persecution, and ar e admitted to the U.S. under an entirely separate laws than those for immigrants. Immigrants are almost all sponsored by family members already living in the US. or employers who need the technical skills of selected foreign born workers 4 Charles E. Keele y , testimony before the Joint Economic Committee of the United States, hearings on The Economic and Demographic Consequences of Immigration, May 21,1986 2 Loans for Refugees. Equally important, Congress must revise Americas refugee admission policy to refl e ct the increasing demand from the Soviet Union, Indochina, and Central America. In a controversial ruling this summer, the Bush Administration declared that the U.S. can accommodate only 50,000 of the 150,000foviet Jewish emigres who.have petitioned to co m e to the U.S. this year The Administrations reluctance to allow more refugees to come to the U.S. is attributable to the budgetary cost of admitting federal cash assistance. Many lawmakers have criticized the White House for taking a heartless and niggard ly approach to the problem.

A middle ground can be reached, which would open the door to refugees and benefit U.S. taxpayers. The U.S. could accommodate-many more refugees fleeing persecution by terminating cash assistance programs for these newcomers, and instead, lending them money to cover resettlement costs for their first two years in America. In this way, the refugee resettlement program could become self-financing. Loan repayments from previous refugees would be used to provide loans for new waves o f refugees. More could enter the U.S and the taxpayer cost for refugee programs would shrink them;Wnder .current=law;-refugees are;entitled to.about $5,000 each in REGULATING IMMIGRATION For the nations first century, America had virtually an open-door imm i gration policy, excluding only paupers and convicts. Congress imposed immigrant restrictions for the first time in 1882, with the passage of the Chinese Exclusion Act, keeping out most Asian groups. It was not until the 1920s, however, after two decades o f immigration of more than one million entrants per year, that the U.S. first began to regulate the overall flow of immigrants.The Quota Law of 1921 instituted what became known as the national origin system, which established per country visa limits that h eavily favored immigrants coming from northwestern Europe, while restricting entry from Asia This national origin preference system, which was widely criticized for promoting ethnic favoritism, lasted for more than 40 years until the.quotas were abolished by the Immigration Act of 19

65. National quotas were replaced with a preference system, giving priority to immigrants with family 6 5 Douglas Seay, Why Is George Bush Closing the Door on Soviet Refugees? Heritage Foundation fiecufive Memomnduni No. 251, September 19,1989 6 For a concise history of U.S. immigration laws, see Barry R. Chiswick, Immigrants and Immigration Policy in William Fellner, ed Contempomry Economic Problems (Washington, D.C.: American Enterprise Institute 7 Although the quotas were p e riodically revised, under the original law each countrys visa allocation was limited to 3 percent of the number of foreign born persons living in the U.S. from that country as measured by the 1920 census. Under this law, for instance, 350,000 of the 358,0 0 0 visas went to Europeans, while China was granted, in one year, 105 visas 1978), pp. 285-324 3 WHYAMI I members already in the U.S. Under this program of family reunification, the pillar of today's current immigration policy, an unlimited number of immed i ate family members defined as spouses, parents, and children can immigrate to the U.S. In addition, a complex preference system allocates 216,000 visas each year for immigrants with less immediate kinship ties, such as adult brothers and sisters of Americ a n citizens. Finally, 54,OOf visas are RICA NEEDS IMMIGRATION REFORM reserved 'each year for workers in-"labor-shortage" occupations The 1965 Immigration Act system of preferences for family and employer-sponsored immigrants continues to be a sound framewo rk for U.S immigration policy. In the past quarter century, however, the 1965 Act has developed several defects. Among them 1) U.S. Immigration Policy Has Grown Restrictive.

Some Americans apparently feel that the U.S. is now accepting unprecedented number s of immigrants. In fact, the nation now has a far more restrictive immigration policy than it had for most of its past. The U.S. now accepts roughly 600,000 immigrants each year. By contrast, at the turn of the century the U.S. routinely accepted more th an one million immigrants annually. Even including the net flow of illegal immigrants each year, which has been estimated by the Census Bureau to be about 200,000 to 300,000, the total level of immigration is still beglow peak levels.

More impor tant, immigration is far below peak years when measured in the more relevant terms of a per centage of the U.S. population.

This is generally regarded as the most useful gauge of a nation's ability to absorb immigrants into its labor force, its Figure 1 Foreign Bor n U.S. Population re70 1660 1890 I900 1910 1920 1930 1940 1950 1980 1970 1980 1985 Acrlta#e Infochart xi-4 8 About half of these 54,000 visas go to the immediate family members of these skills-tested immigrants 9 John G Keane, Director, Bureau of the Cens u s, testimony before the Joint Economic Committee of the United States, hearings on "The Economic and Demographic Consequences of Immigration May 21,1986 4 physical infrastructure, and its existing sociaVcultura1 environment. The U.S in the 1980s has admit ted roughly 2.5 immigrants for every 1,000 residents.

The average immigration rate over the past 100 years is over twice this high or 6 immigrants for every 1,000 residents. Furthermore, the percentage of U.S. citizens who are foreign born is also far belo w historical levels, as shown in Figure 1 industrialized nations. Figure 2 shows that'many countries, which are thought to have homogenous populations, actually accept a larger percentage of The us. is ?lO&SS affeded by imgrantS than.are most other wester n I immigrants than does the U.S. I Figure 2 Percent of Population Immigration AUBtralh Bel#lum Canada Denmark France Germany Italy Nelherlandi New Zealand Norway Spain Sweden Switzerland United Kinadom USA 0 0.2 0.4 0.8 0.8 I 1.2 1.4 1.8 1.8 Percentages i n 1985 Hal- MoChar 2) U.S. Immigration Policy Deprives the Nation of Highly Skilled Immigrants.

Recent, although con troversial, research sug gests that the skill and education levels of America's newest im migrants have fallen compared to immigrants who entered the U.S. in earlier periods.

One study, by im migration economist Barry Chiswick of the University of Illinois Chicago, attributes this decline in the economic 10 ierformance of recent arrivals to the predominance of family-sponsored im I migration . He writes Immigrants who come under kinship preferences rather than occupational preferences seem to do less well. They have less schooling and they do less well in the U.S. labor market even when schooling level is held constant than the immigrants who are brought in because they themselves are skills tested 10 George J. Borjas Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants Journal of Labor Ecoiioniics, Vol. 3, No. 4,1985, pp. 463489; and Barry R. Chiswick Is the New Immigration Less Skilled Than the Old Journal of Labor Economics, Vol. 4, No. 2,1986, pp. 168-192 11 Barry R. Chiswick, testimony before the Joint Economic Committee of the United States, hearings on "The Economic and Demographic Consequences of Immigration May 22,19 8 6 5 Reuniting Families. Yet, long before the family preference system was formally adopted in 1965, a large share of immigrants came to the U.S. to reunite with family members. Family immigration thus is not new. What is new and at least partially explain s the lower earnings of recent immigrants is that many of the highest skilled immigrants from around the world who traditionally have come to the U.S. now find the nations gates closed to them on Iminigration and Refugee Policy cO-mplSned of the b-arriers c onfronting skilled immigrants The low priority accorded nonfamily immigrants and a without previous family ties in the U.S. or extensive training and skills to immigrate here The problem is worsening: in 1987 only 24,000 (or 4 percent) of the 602,000 immi g rants were admitted to the U.S. on the basis of their personal skills and education. In contrast, 25 percent of Canadas immigrants are skill tested, and almost 50 percent of Australias are.13 A 198 1 presidential-blue-ribbon panel o~.asthe~tfS,elect.Comr; l ission cumbersome labor certification process has made it difficult for persons 3) U.S. Immigration Policy Limits Ethnic Diversity nations immigration policy should be to encourage ethnic diversity among those coming to the U.S. Yet Europeans and Africans have been largely shut out of the immigration process because they lack family connections in the U.S. Figure 3 compares the percentage of immigrants to the U.S One objective of the Figure 3 Immigrants Admitted to the U.S. By Region of Birth 60 50 40 SO 2 0 10 0 Europe Aala Aiicn N. America S. &erica 12 Report of the Select Commission on Immigration and Refugee Policy, Executive Summary, 1981 13 Julian L. Simon, Getting the Immigrants We Need, The Washington Post, August 3,1988 6 I I who have come from each region of the world prior to and after enactment of the 1965 Immigration Act. The proportion from Europe has declined from 52 percent prior to the 1965 Act to just 10 percent over the past three years.

Many Americans mistakenly believe that European immig rants have been replaced with a huge influx of Latin Americans, particularly Mexicans?4 Figure 3, however,-shows that the share of immigrants from North and Central America today is virtually unchanged from the l95Os and 1960s. The dramatic shift in immig r ant origins has been from Europe to Asia.Today the U.S. accepts the same number of immigrants from the Philippines and the Republic of China onTaiwan as it does from the entire continent of Europe I Before Congress can establish a pro-family, pro-growth i m migration policy it must know what impact immigrants have on the nations economy and social fabric. Most research has found that immigrants benefit U.S. citizens economically and socially.16 found that eight out of ten polled believe that 20th century imm i ration has had a very favorable effect on the nations economic growth.Today, a disproportionate share of Americas Nobel Prize winners, high school valedictorians, inventors, Ph.D. scientists and engineers, and business entrepreneurs are foreign born.18 T h e U.S. Council of Economic Advisers concluded its 1986 study of the economic impact of immigrants: For much of A 1986 survey of thirty of Americas most distinguished economic scholars 14 Immigration from Mexico is not currently at high levels. A 1988 Gene ral Accounting Office report notes that there were fewer immigrants from Mexico in 1985 than in 19

72. In general, migration flows from Mexico have been quite stable in this century. U.S. General Accounting Office, 1mmigration:The Future Flow of Legal Immigration to the United States, 1988 15 Americas recent Asian immigrants have been remarkably produc t ive citizens. Studies by the U.S. Census Bureau and the Rand Corporation suggest that recent Asian immigrants are the most highly educated, skilled and economically successful immigrant group the U.S. has ever had. See Kevin McCarthy and R.B.Valdez Turren t and Future Effects of Mexican Immigration in California (Santa Monica, California: Rand Corporation, 1986); Constance Holden, Debate Warming Up on Legal Migration Policy, Science, July 15 16 A comprehensive review of studies on the economic benefits of i mmigration is contained in Julian L. Simon How Do Zmmigmnts Afect Us Economically? Center for Immigration Policy and Refugee Assistance Georgetown University, 19

85. For an examination of the sociaVcultura1 consequences of the new immigrants see James Fall ows, Immigration: How Its Affecting Us, The Aflatttic Monfhly, November 1983, pp. 45-106 17 Stephen Moore, Social Scientists Views on Immigrants and U.S. Immigration Policy: A Postscript, Attrials of fhe Aniericart Academy of Political and Social Sciences , September 1986, pp. 213-217 18 Roy Lerner, Numbers, Origins, EconomicValue and Quality of Technically Trained Immigrants into the United States, Scienfometics, Vol. 6, No. 4,1983, pp. 243-259 1988, pp. 288-290 7 the Nations history, U.S. immigration poli c y has been based on the premise that immigrants have a favorable effect on the overall standard of living and on economic development. Analysis of recent migrant flows bears this Added former U.S. Ambassador to the United Nations Jeane Kirkpatrick during the 100th Anniversary of the Statue of Liberty: What gives resonance to our Republic is its continual renewal by new citizens who bring to us a special sense of the importance of freedom.

Careful research discreditsmost of the coinmoniobjedions to immigran ts that they take jobs from American workers and drive down their wages; that welfare abusers; and that they fail to integrate into American society?l On balance, whether they come to reunite With families in the U.S to fill skill gaps in the U.S. labor m a rket, or to start new businesses, immigrants are valuable assets, not liabilities, to the nation. m B r C 41 I I I they strain the nations natural resources and infrastructure; that they are Labor Market Impact of Immigrants Immigrants do not just take jo b s, they create jobs through their consumption, their propensity for starting new businesses, and their contribution in keeping U.S. businesses internationally competitive I The U.S. Department of Labor this year completed an exhaustive study on the effect s of immigrants on job opportunities and wages for native-born Americans.

The study concludes: The presence of immigrants in the U.S labor market benefits employers, consumers and the U.S. international economic position Neither U.S workers nor most minori ty workers appear to be adversely affected by immigration especially during periods of economic expansion such as those we have been experiencing in recent years.,,22 Increasing Workers Income. The U.S. Council of Economic Advisers reached a similar concl usion in its 1986 analysis of the impact of immigrants.

The report finds: Arguments supporting the restriction of immigration to protect American jobs are similar to those favoring protectionism in international trade. Limiting the entry of immigrant labor may increase the demand for some groups of native-born workers, but it will impose costs on consumers, investors and other workers. The report emphasized that the 19 U.S. Council of Economic Advisers, The Economic Effects of Immigration, l7ie Economic Re p ott of flie President, 1906, pp. 213232 20 Jeane Kirkpatrick, we Need the Immigrants, 77ie Washington Post, June 30,1986, p. A-11 21 These objections are enumerated in: Richard Lamm and Gary Imhoff, The Zmmigmtion lime Bomb: The Fragmenting ofAmencu (New Y ork Truman Talley Books, 1985 22 U.S. Department of Labor, The Effect3 of Immigration on the U.S. Economy and Labor Market, Immigration Policy and Research Report #1,1989 8 L net effect of an increase in labor supp& due to immigration is to increase the a g gregate income of native workers Impact on Taxes and Public Services Immigrants generally come to the U.S. to work and improve their economic condition, not to collect welfare. A 1985 study by Ellen Sehgal, of the U.S. Bureau of Labor Statistics, examines Census Bureau data to compare-the use-of publicmsistance-by the4J.S: native-born population with that by the foreign-born who entered the U.S. before 19

82. Sehgal finds that contrary to what seem to be widespread perceptions, the foreign-born do not seem more likely than the U.S. born to be recipients of government benefits.= Indeed, the share of foreign-born collecting public assistance including unemployment compensation, food stamps, Supplemental Security Income, and Aid to Families with Dependent Chi ldren (AFDC was 12.8 percent versus 13.9 percent for the native born.

After about fifteen years in the U.S immigrants earnings generally exceed those of native-born workers. The result: most immigrant cohorts pay more in taxes over their lifetime than they receive in government benefits, thus resulting in a net fiscal benefit to the U.S.Treasury. One study has estimated that the average immigrant pays $12,000 to $20,000 (in 1975 dgllars) more in lifetime taxes than he or she receives in government benefits . The biggest fiscal windfall to U.S.-born citizens is through the large contributions immigrants make to the Social Security system. Immigrants pay Social Security taxes during their working life, even though they do not have parents who are collecting be nefits, thus causing a one-time windfall to the retirement systems trust fund. By the time the immigrants collect Social Security themselves, their children are paying into the system.

Public Assistance for Refugees Because of the large recent influx of So viet Jews to the U.S much public attention has been focused on the taxpayer cost of admitting refugees. Unlike economic immigrants, who must prove that they are not likely to become a public charge before they can come to the U.S refugees are, under curre n t law, entitled to about $5,000 in public assistance.These costs cover such short-term readjustment expenses as transportation to the U.S English language training, job placement, medical checkups, and access to U.S. public aid programs I *I 23 U.S. Counc i l of Economic Advisers, The Economic Effects of Immigration, The Economic Report of the President, 1986, pp. 213-232 24 Ellen Sehgal, Foreign Born in the U.S. Labor Market: The Results of a Special Survey, Monthly Labor Review, July 1985, pp. 18-24 25 Jul i an L. Simon, op. cit p. 15 9 Paying More Taxes. Yet, as with immigrants, refugees make rapid economic progress within a few years in the U.S. A 1984 study by the Church World Service, called Making It OnTheir Own, examined the economic progress of 4,500 r e cent Indochinese refugee families.The study found that after three years in the US only 7 percent were collecting AFDC or other cash assistance, and less than 20 percent were collecting food stamps A study by Rita Simon on Soviet Jewish refugees and immig rants, concluded more in taxes than they were collecting in public benefits.

Given the economic success of most refugees coming to the U.S Congress should stop treating new Americans as welfare recipients and should consider converting federal refugee resettlement aid programs into a loan program.

Instead of giving each refugee the 5,000 in readjustment services, that amount would be loaned to the refugee. Modeled after the college student loan program, the refugees would be entitled to a low interest fede ral loan or loan guarantee for their first two years in the U.S. They would be expected to pay back this money after five years in the US, provided their income had risen above 120 percent of the poverty level. Loan repayments would be placed in a fund to finance new waves of refugees. This program would reduce, or even eliminate entirely, the budgetary cost of refugee resettlement programs and thereby provide more room in America for refugees fleeing persecution Regional Impact of Immigrants One legitimat e concern about immigration is that cities and counties that attract large numbers of immigrants may bear a greater burden than the rest of the nation in assimilating these newcomers and absorbing them into the labor force. Even here, however, studies find that the residents of local areas with a heavy influx of immigrants mostly benefit from these newcomers.

What may be the most comprehensive study on the economic effects of immigration is entitled, The Fourth Wave: Californias Newest Immigrants conducted by the Urban Institute in 19

85. It investigated the effe% of immigrants between 1970 and 1980 on the Los Angeles economy.

The study finds that black unemployment rates were not raised, and if anything were lowered, by the influx of Mexicans. For Los Ang eles consumers, Mexican immigration meant lower prices for many goods and services and less inflation than the nation as a whole. Despite the 220,000 new Mexican immigrant households that entered Los Angeles during the 1970s, unemployment rates in the cit y fell more than the national average I-9 that,;after only-two yearsin the.U.S thesemewcorners were contributing 26 Church World Service, Making It onTheir Own: From Refugee Sponsorship to Self Sufficiency, New York 1983 27 Rita J. Simon, New Lives: The Ad j ustment of Soviet Jewish Immigrants in the United States and Ismel Lexington, Massachusetts: Lexington Books, 1984 28 Thomas Muller and Thomas Espenshade, llie Foudh Wave: Califoniias Newest Immigmnts (Washington D.C The Urban Institute Press, 1985 10and per capita income rose faster than the national average from 1970 to 19

80. Nearly one-quarter of the jobs filled by Mexicans would have disappeared or never materialized if the immigrants had not filled them its metropolitan area, the economic consequences of immigration have been similarly positive. According to research by the City of New Yorks Office of City Pladng, the foreign born in New York are 1ess.likely to collect public assistance, less likely to commit crimes, morelikely to be in the labor force and no more likely to be unemployed than U.S.-born residents (seeTabl e).

The report concludes: NewYork City seems well able to absorb immigrants at the rate at which they are now entering the city.There seems to be room for them in the job market, in the institutional structure, and in the infrastructure Immigrants do pose some problems to this city, but the balance is unquestionably favorable.B In New York City which has an estimated two million foreign born living in Comparison of Economic and Social Statistics of U.S.-Born and Foreign-Born in New York City 1980 Are Immig r ants Integrating about the influx of new immigrants -the Italians, Irish, Jews, Chinese At one time or another in this century, American citizens have complained 29 Elizabeth Bogen, testimony before the Joint Economic Committee of the United States, heari n gs on The Economic and Demographic Consequences of Immigration, May 29,1986 11 Cubans, and others.30 The typical charge has been that the newcomers have not integrated. Predictably, this is the criticism of todays new immigrants Hispanics and Asians Notab l e Success. The fact is that immigrants seem to adapt remarkably well to America.Typica1 seems to be the message of a Washington Post news storythissummer F Thirteen of the 17valedictorians-in Boston-public high schools this year are foreign-born, the high est number officials can remember.

China, Vietnam, Portugal, El Salvador, France, Italy Jamaica, and Czechoslovakia. Some arrived only in the last five years, most could not speak English when they arrived. School officials attributed the high percentage t o an influx of immigrants and the motivation of children who had to overcome tremendous obstacles just to get into the U.S?l They come from around the world, including from The rise of Asian and Hispanic ethnic urban neighborhoods, also has raised concern s about immigrant integration patterns. The charge is made that these ethnic enclaves insulate immigrants from the American mainstream and are socially fractious. Yet for most of this century, immigrants have tended to settle in ethnic neighborhoods in maj o r U.S. cities without impeding the acculturation process. In fact, according to the 1989 U.S. Labor Department study on the new immigrants, these strong community and family ties act as a social and economic safety net for newly arrived immigrants. The re p ort finds: Although not uncontested in the literature, it appears that the larger more successful, and better organized the ethnic community, the smoother the newcomers entry into the labor market, and the better the prospects for upward economic mobility . 32 Fluent in English. By far the most common criticism of the post-1965 Act immigrants, particularly the Hispanics, is that they do not learn English. If true, this is not good for the U.S because it spawns ethnic divisiveness, and it is not good for the i mmigrants, because it severely constrains their upward economic m~bility But immigrants, in fact, are learning English.The 1980 Census revealed that 98 percent of U.S. residents speak English well, the highest percentage 30 Rita J. Simon, Public Opinion a n d the Immigrant (Lexington, Massachusetts: Lexington Books, 1985 31 l7ie Washington Post, June 23,1989 32 U.S. Department of Labor, The Effects of Immigration on the U.S. Economy and Labor Market, op. cit p. 154 33 F.L. Rivera-Bat$ English Language Profic i ency and the Economic Progress of Immigrants in the U.S Paper presented at the U.S. Department of Labor Conference on Immigration, Washington, DC, 1988 12 since records have been kept. A 1988 study by the Hispanic Policy Development Project examined the E nglish proficiency of Spanish-speaking immigrants and found that some 75 percent of the immigrants are speaking English on a regular daily basis by the time they have been in the country for 15 years.34 presewe their language, almost all children of i

gran ts,speak English. A 1985 study by the Rand Corporation onMeScans inCalifornia examined the education levels, rate of economic advancement, and knowledge of English of first, second, and third generation Mexican-Americans. Although these Mexican immigrants , in contrast to most Asian migrants, generally have limited English ability, their children are bilingual, and their grandchildren speak fluent English (while only about half have Spanish,proficiency The study notes that this has been the classic language adoption pattern of immigrants since non-English speaking Europeans first started coming to the U.S.The Rand study concludes: Mexicans are not fostering a separate society; they are integrating into the states society exactly as other immigrants have More important, even when first generation immigrants attempt to CHARTING A PRO-FAMILY, PRO-GROWTH IMMIGRATION POLICY In crafting a new legal immigration policy for the U.S Congress must delicately balance several competing national objectives. These tradition a lly have included 1) Reuniting families separated due to migration 2) Attracting immigrants who will make strong economic contributions 3) Preserving Americas sociaVcultura1 diversity 4) Reserving the right as a sovereign nation to be selective and to exc l ude Congress took an important first step in meeting these immigration policy some immigrants goals when the Senate passed the Kennedy-Simpson immigration bill this July. The key features of the bill are 1) Raising the national level of nonrefugee immigra n ts to 630,000 per year slightly more than under current law 2) Tripling the number of skill-based immigrants from 54,000 to 150,000 per year.These immigrant Visas would be reserved for immigrants with exceptional abilities in the sciences, arts or busines s , employer-sponsored immigrants, and selected immigrants. This last category would admit 34 Calvin Veltman, The Future of fhe Spanish Language in the United States, Hispanic Policy Development Projects, 1988 35 K.F. McCarthy and R.B.Valdez, Current and Fu t ure Eflects of Mexican Immigration in Calgomia (Santa Monica, California: Rand Corporation, 1985 13 54,000 immigrants each year through a point system that gives immigrants a score based on their age, occupation, and education level entrepreneurs to immig r ate to the U.S. each year, provided that each invested $1 million in a new U.S. business and created ten new jobs. Some inJfrural. and disadvantaged areas I Although an improvement over current law, the Kennedy-Simpson Bill falls short of the comprehensiv e reforms needed to modernize U.S immigration policy.The Senate bills overall ceiling on immigration still falls far below projected U.S. skilled labor needs for the next decade. Although it preserves the current family preference structure, the bill does n othing to reduce the waiting period for immigrants who, since the early 1970s, have sought to join their families in the U.S. Many African and European countries, moreover, would continue to be largely excluded from the U.S immigration process 3) Establis h ing a new investor immigrant program.This would allow 6,800 2,000 of these visas would be reserved for immigrants who invested $500,000 RECOMMENDATIONS While building on the positive features of the Senate bill, the House should 1) Raise annual immigratio n levels gradually.

Although portrayed as pro-immigration, the Kennedy-Simpson bill consider the following reforms would raise immigration levels by an almost imperceptible amount: from 2.5 to 2.8 immigrants annually per 1,000 American citizens. Given the economic and sociaVcultura1 contributions of immigrants, the U.S. would benefit by raising immigration quotas to a higher 1evel.The case for increasing immigration is particularly strong in light of foreseeable US. demographic trends that indicate a dange rous skilled-labor shortage. This year the U.S.

Department of Labor forecast that the nation will create nearly 30 million new jobs before the year 2000 -a 19.2 percent increase. At the same time the size of the labor force is expected to expand by only 17 .8 percent The shortage will be especially acute in skilled occupations. As many as half a million new engineering jobs are expected to go unfilled because U.S.-born citizens will lack the technical training to fill them. Without the immigration of skille d workers, U.S. firms may be forced to move their top research facilities abroad. Finally, because most immigrants come to the U.S. during the start of their working life, immigration is one of the few methods of reversing the graying of Americas workforce and its attendant economic problems I 36 U.S. Department of Labor, Labor Murket Shottuge January 1989, p. 4 14 2) Abandon the concept of an inflexible immigration ceiling Some members of Congress, led by Senator Simpson of Wyoming, want to establish an ov e rall annual immigration ceiling. If they succeeded, it would be the first such ceiling in the nations history. Such an inflexible ceiling would make it difficult for policy makers to adjust immigration levels to changing economic and political circumstanc es in the U.S. and the rest of the world.

Furthermore, a cap effectively could eliminate seyeral important categories under which immigrants he and should continue to bead&tted. As immigrants entering through unlimited categories, such as immediate family members of U.S. citizens, increased over time, other important immigrant sources, such as skill-based immigrants, would have to compete for the shrinking number of remaining visas. I 3) Expand the Family Preference System.

An essential element of a pro-fa mily immigration bill is to preserve the family reunification program. Long before the kinship preference system was formally adopted in 1965, immigrants came to the U.S. in family groups or to join family members who had come before. The U.S. rightly enc o urages family-sponsored immigration because the nation has always relied on the family as the primary unit for promoting social values among its citizens. For newly arriving immigrants, the family and broader ethnic community serve as an essential social s afety net, which assists these newcomers in quickly becoming productive citizens. Allowing families separated through international migration to reunite in the U.S. is also a central element of a humanitarian immigration policy preference visas to offset a n increase in skill-based immigrants. Support for this is based on the false premise that the family preference system has fostered chain migration, where one immigrant presumably eventually pulls in as many as 25 relatives, including adult brothers and s i sters, cousins nieces, uncles, and in-laws. The truth is, however, according to a General Accounting Office report last year, that massive chain migration is generally not occurring.37 And, adds the report, two-thirds of immediate relatives entering the U .S. each year have been sponsored not by earlier immigrants but by native-born Americans.

Fifteen Year Wait. Family immigration is too constrained, rather than too generous, under current 1aw.The backlog of immigrants waiting to come to the U.S. each year is now 2.3 million, up from 1 million in 19

80. Most of these immigrants are waiting, some for as many as fifteen years, to reunite with family in the U.S.These waiting periods could be shortened by increasing visas for immigrants arriving through the fam ily preference system from 216,000 to 300,000 per year Some proposals in Congress, however, would reduce the number of famiIy 37 U.S. General Accounting Office Immigration: The Future Flow of Legal Immigration to the U.S., 1988 15 4) Increase employer-spo n sored immigration The most efficient method of attracting highly skilled workers to the U.S without displacing American workers, would be to expand the employer-sponsored immigrant program. Under this program, the employer must certify with the Department of Labor that there Will be no adverse effect on the wages and working conditions of other U.S. workers Nevertheless,-U.S-employers-often-must-wait up to-five years and pay up to 10,000 in attorneys fees before they can transfer foreign workers to the U.S .

Frank Kittredge, President of the ForeignTrade Council, a group of U.S businesses involved in international trade, complains that the current process for bringing skilled workers to the U.S. is characterized by inflexibility delay, and an absence of pred ictability. Adds Kittredge American companies have for many years sent select personnel abroad to fill managerial and technical positions in their foreign operation, and these international transfers have usually been handled expeditiously by host countri e s eager to assure successful projects leading to improved local employment and enhanced economic acti vity Ironically, when U.S. companies need to bring foreign personnel to the United States to maintain a competitive position in a particular field, they d o not have the opportunity to make similar expeditious transfers of personnel. 38 The Senate immigration bill roughly would double the number of visas for business-sponsored immigrants. Only in the short term, however, will these numbers meet even modestl y the dynamic labor needs of U.S. firms competing in global markets. As international trade continues to expand, so will the needs of firms to recruit foreign workers with knowledge of overseas markets. A better long-term policy would be to allow the ceili n g on employer-sponsored immigrants to fluctuate each year, so the supply meets demand. Firms, moreover, should be assured of never having to wait more than eighteen months to transfer a technically skilled immigrant worker to the U.S 5) Launch a new inves tor immigrant program.

The single most beneficial feature of the Kennedy-Simpson Bill is the creation of an investor immigrant program. Yet, here again, the Senate bill does not go far enough. It would permit up to 6,800 entrepreneurs to come to the U.S. e ach year if they started a new business in the U.S. and employed at least ten Americans. Of these visas, 2,000 would be reserved for immigrants investing at least $500,000 in a new enterprise in a rural or economically depressed area of the nation.There s h ould be no numerical limitation 38 Kittredge, op. cif 16 I I I however, on the number of job-creating immigrantswilling to start new businesses in distressed areas of the U.S. Furthermore, the size of the investment required should be lowered to $lOO,OOO, which the Small Business Administration finds is the typical start-up cost of a new b~siness This would open the program to more prospective small business investors and defuse criticism that this program is only for the wealthy example, has had a highly s uccessful investor immigrant program since the early 1980s. The result: Last year alone some 4,000 entrepreneurs created 15,000 new jobs and $2 billion in business investment in Canada.40 These businesses included manufacturing, textiles, computer service s , real estate development, and financial services: These are precisely the kinds of ventures needed by Americas economically depressed areas 6) Create a category of skill-based independent immigrants, allotting each region equal number of visas The U.S. s h ould alloG 100,000 immigrants per year to come to the U.S independent of family or employer sponsorship. These independent immigrants would be chosen through a point system measuring their personal attributes, including age, education, work experience, an d education level, as in the criteria in the Kennedy-Simpson immigration bill Yet unlike the Senate bill, which essentially establishes a random lottery system that would include all minimally qualified immigrants, the U.S. would select immigrants with the highest point score each year from each region of the world.

Example: Africa, Asia, Europe, North America, and South America could be allotted 20,000 of these visas each, thus ensuring greater ethnidcultural diversity than under the current immigration po licy or the Senate plan. This program would increase the number of highly productive immigrants coming to the U.S. while ensuring ethnic diversity Such a program would generate.new. jobs ,for ≠&ns.-Canada, for CONCLUSION Congress now has the opportunity to craft an immigration policy at once more humane and more economically sensible than the now obsolete 1965 Immigration Act. Raising U.S. immigration quotas would not-prompt.an unprecedented surge in new arrivals. Increasing immigration to 800,000, for i n stance, would mean the entry of just three immigrants each year for every 1,000 Americans. This is far from an open-door policy and far below the historical average of six per 1,000 residents. But it would allow tens of thousands of immigrants to reunite w ith their families sooner, help U.S I 39 According to a 1984 National Federation of Independent Business survey of 2,500 small businesses, 90 percent started with capital requirements of less than $loO,OOO. A $500,000 start-up investment requirement thus s eems well beyond the norm for the vast majority of newly formed American fwms 40 Demetrios G. Papademetriou, The Canadian Immigrant-Selection System: A Technical Report, draft report, October 1988 17 3 industry attract needed skilled labor, and open Ameri c as doors to immigrant entrepreneurs wishing to start new businesses intense pressure from a wide range of special interest groups to close Americas gates. Such a policy shift would be a mistake. Although Congress should remain careful to keep out such und e sirables as criminals and those who would become a public charge, many productive immigrants who would make solid citizens are shut out under the current system.This could be corrected by a new immigration act Solid Citizens. Today, as in much of the nati ons past, Congress faces Stephen Moore Grover M. Hermann Fellow in Federal Budgetary Affairs 18